Staff Reporter: Bangladesh Bank has issued a new policy to curb the flow of interest on loan waivers.
In a circular issued by the Banking Regulation and Policy Department of Bangladesh Bank on Thursday, it was informed that in some cases, the banks will not be able to waive the interest.
The circular, signed by Maksuda Begum, general manager of the banking regulations and policy department, said the bank was often waiving interest rates in favor of customers, regardless of special circumstances.
“As a result, customers may be reluctant to repay the bank within the stipulated time to avail of the interest waiver facility.”
The new policy states that the original debt (original) cannot be forgiven in any way. In addition, loans made through ‘fraud’ and interest on ‘intentional defaulters’ cannot be waived.
The central bank says interest rates cannot be waived by crippling the bank’s income sector.
Approval from the Board of Directors of a bank is required for the waiver of interest of a customer. However, the power to waive the interest on the original loan up to Rs.
The new policy stipulates that in case of interest waiver, the bank will have to ensure recovery of funds. However, this rule can be relaxed in the case of projects that have been closed for three years.
Again, if it is not possible to recover the funds by selling the loan collateral, securities, project assets, and personal assets of the project entrepreneurs, then there will be an opportunity for the bank to recover the funds.
If the money is not recovered even after taking other necessary steps including legal action for recovery of dues, the issue of recovery of funds of the bank will be relaxed.
If the borrower dies due to natural calamity, epidemic, plague, river erosion, or misfortune and the borrower is unable to repay the loan on ‘reasonable grounds, the obligation to recover the funds will be relaxed.
